Announcements, information and updates from the AG Alliance Members and Associates
April 24, 2020
COVID-19 ROUNDUP:
REGULATING TECHNOLOGY
PROPERTY MANAGEMENT ISSUES
Editor's Note:

Echoing last week's coverage of cybersecurity concerns and efforts related to COVID-19, this week's special edition news roundup is dedicated to continuing the conversation on the AG role in enforcing technology regulations to protect consumer data.

We will also review property management issues and take a look at how our AGs are fighting to protect mortgages and property leases in the residential and retail spaces.

BIG TECH
Multistate antitrust probes into Facebook and Google are moving ahead during the current pandemic. Attorneys General express growing concerns with big tech and its power over American society, calling for more regulation, specifically around the movement of consumer data.

PROPERTY
To offer relief, the federal government is suspending evictions and foreclosures, and the CARES Act is providing forbearance and foreclosure relief, but there are many restrictions. A bipartisan coalition of AGs is urging the Federal Housing Finance Administration and the Department of Housing and Urban Development to further protect homeowners from the economic toll of the COVID-19 pandemic.

Many homeowners have been contacted by their lenders regarding forbearance or deferment options.
  • Forbearance lets you make reduced payments or no payments for a set period of time, though your loan continues to gain interest during this period. The skipped payments are then due at the end of that designated timeline. In some cases, a lender may let you spread those skipped payments out over a few months.
  • Deferment also allows you to skip payments, and sometimes it puts your interest on pause, too. With deferment, your payments may be due once the designated time period ends or they may be tacked onto the end of your loan (basically extending your loan term).

The CARES Act provided a maximum of $1200 to eligible individuals, which is not enough to pay for 90% of people's monthly rent in largely impacted areas like San Francisco, Los Angeles, Chicago and New York City. Attorneys General are active players in protections for homeowners and renters, working to pause evictions and payments for those affected.

The pandemic has also brought to light a significant impact on retail leases. With both stores and shopping centers now closed, the opportunity for any sale is gone and the lease provides the retailer no benefit. Retail tenants and landlords do not agree on what their leases provide regarding the obligation to pay rent in the current situation. ( Crowell & Moring LLP.)

Below, you will find more information and resources on the above actions. We hope this overview is helpful in guiding your AGOs on response plans and best practices for regulatory efforts related to technology, mortgages and lease management.
TECHNOLOGY REGULATIONS
Texas Attorney General Paxton Pushes for Regulation of Big Tech Companies
Politico Pro
April 22, 2020

The U.S. needs more regulation of the major tech companies, Texas Attorney General Ken Paxton said during an event hosted by the American Bar Association.

Paxton is leading a multistate antitrust probe into Google, and said Silicon Valley's power over American society is posing a growing challenge to government at all levels.

In particular, Paxton highlighted some potential value to data portability rules, which seek to allow consumers to transfer their data from one online service to another. Both Europe’s General Data Protection Regulation and California’s Consumer Privacy Act require businesses to allow consumers to move their data.
PROPERTY MANAGEMENT ISSUES
MORTGAGE
Bipartisan Coalition of 35 AGs Suggests Actions to Deal with Unprecedented Disruption to the Mortgage Market  
April 23, 2020

Bipartisan Coalition of 35 Attorneys General recommended actions to help homeowners in letters sent to the Federal Housing Finance Administration and the Department of Housing and Urban Development.

The coalition applauded federal efforts to suspend evictions and foreclosures, as well as expressed appreciation for additional forbearance and foreclosure relief provided by the CARES Act. The coronavirus-relief legislation, which was signed by President Trump on March 27, applies only to federally backed mortgages, which make up approximately 62 percent of the mortgage market.

The letters urge the following actions to protect homeowners from the economic toll of the COVID-19 pandemic:

  1. Revise the forbearance programs so that forborne payments are made as additional monthly payments at the end of the loan's term, rather than requiring immediate repayment of the missed payments as a lump-sum at the end of the forbearance period;
  2. Expand eligibility for loss mitigation programs for borrowers emerging from forbearance; and
  3. Clarify that the federal moratorium on foreclosures and evictions applies to all aspects of the foreclosure and eviction processes.
RESIDENTIAL EVICTIONS
Washington Attorney General Ferguson Enforces Emergency Eviction Proclamation, Sues Nevada-Based Property Management Corporation for Issuing Notices to 'Pay-Or-Vacate'
April 20, 2020

Attorney General Bob Ferguson filed a lawsuit against JRK Residential Group Inc. for violating Governor Inslee’s Emergency “Evictions” Proclamation. Inslee’s “Evictions” Proclamation establishes a temporary moratorium on evictions for the inability to pay rent. The Proclamation specifically prohibits landlords from issuing Notices to Pay or Vacate during the proclamation’s effective period.
RETAIL
Anticipating the Pandemic's Impact on Retail Leases
Law 360, Crowell & Moring LLP
April 7, 2020

Few industries have been as impacted as much as brick-and-mortar retail. Shopping centers and retail stores (other than those providing essential services) have closed and retailers and landlords have been talking to their lawyers. It is certain that the advice retailers and retail landlords have been getting is “we need to read the lease language, understand the specific facts, and see what law there might be that deals with similar situations.”

The only reason a retailer enters into a lease is to operate its business in the specified space — meaning to sell its merchandise to customers in the store. With both stores and shopping centers now closed, the opportunity for those sales is gone and the lease provides the retailer no benefit. Retail leases also contain agreed-upon provisions regarding anticipated risks that could prevent retailers from operating their businesses.

The construction provisions of most retail leases similarly reflect this concept, providing that the payment of rent begins only after the tenant can open its store and begin to operate its business. All of these provisions recognize the fundamental bargain struck between retailers and landlords: To the extent that the retailer cannot operate its business, rent will not be required for the time and extent that the business cannot be operated.
PROPOSED AMENDMENT TO
BANKRUPTCY CODE
Senate Majority Leader Mitch McConnell in Favor of Allowing States to File for Bankruptcy
Municipal Debt Industry Update

“I would certainly be in favor of allowing states to use the bankruptcy route. It saves some cities. And there’s no good reason for it not to be available. My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that. That’s not something I’m going to be in favor of.”

Senate Majority Leader Mitch McConnell (KY-R), would be “in favor” of amending the Bankruptcy Code to allow states to file for bankruptcy, according to a transcript of a radio interview.

McConnell’s remarks follow a request from Illinois State Senate President Don Harmon for $40 billion in federal aid, including $10 billion for pensions, $15 billion to “stabilize” the state budget and $9.6 billion for the state’s cities.
CANNABIS PROJECT: WEBINAR FOLLOW-UP
The AG Alliance Cannabis Project showcased its agility and expertise by hosting a Virtual Summit on Cannabis Law & Policy on Tuesday, April 21.

We were delighted to have opening remarks by Attorneys General Tish James (NY-D) and Wayne Stenehjem (ND-R). Their bipartisan leadership reminded us that the national debate on cannabis reform affects millions of Americans; patients and consumers, parents and families, law enforcement officers, federal, state and local government leaders, and the business community.

Over 375 guests joined the audience to learn from over 25 subject matter experts across all levels of government, law enforcement, advocacy organizations, and the private sector.

The key takeaway from the Summit is that the issues triggered by cannabis reform are numerous, complicated, and will not be solved overnight. And just like past efforts to protect consumers and ensure the rule of law in other arenas, the Attorneys General are poised to lead through the morass.

CONTACT FOR MORE DETAILS:
Austin Bernstein,
Cannabis Project Director
ATTORNEY GENERAL
MISC.

  • Missouri became the first state to file a lawsuit against Beijing over its response to the coronavirus. AG Schmitt seeks damages to make up for “the enormous loss of life, human suffering, and economic turmoil” resulting from the pandemic.

  • The cannabis lobby is flexing its muscle in Washington and seeking aid for small businesses in the next coronavirus relief package. The CARES Act currently prohibits businesses engaged in cannabis-related activity from receiving any small business loans.Cannabis groups say that is unfair and are pushing to change that in the next aid package.

RELIEF EFFORTS

  • Tennessee Attorney General Slatery reached a settlement with the Colvin brothers for price gouging emergency and medical supplies. The brothers agreed to surrender all supplies, including approximately 17,000 bottles of hand sanitizer, to a nonprofit organization in Tennessee.


  • Michigan Attorney General Nessel commended CVS for establishing temporary drive-thru, rapid COVID-19 testing sites, providing state residents with on-the-spot results at no cost. CVS Health has opened similar large-scale rapid testing sites in Connecticut, Georgia, Massachusetts and Rhode Island.

CONSUMER PROTECTION

  • DC Attorney General Karl Racine led a coalition of 22 AGs calling on the Federal Trade Commission (FTC) to enhance consumer protections around funeral home services.

  • Nebraska Attorney General Peterson's office began sending warning letters to healthcare providers and others who are making deceptive or unsupported claims about their ability to test for COVID-19


VICTIMS' RIGHT WEEK

  • Oklahoma Attorney General Hunter reminded victims of domestic abuse or child abuse that shelters and other crisis centers are still operating amid this pandemic.

MENTAL HEALTH

SPONSOR SPOTLIGHT:
PRIVATE SECTOR ACTIONS
CONGRATULATIONS

  • The AG Alliance congratulates the AG Practice Firms and individual lawyers recognized in Chambers and Partners 2020 rankings of the top in Government Relations: State Attorneys General practices in the USA.

HEALTHCARE


RELIEF EFFORTS

  • Chevron donated $12 million in global initiatives to assist local communities during COVID-19.

CONSUMER PROTECTION

  • Hullen & Ross, CPA's alerted clients to a list of some of the more prevalent coronavirus scams that consumers need to watch out for.
CWAG Executive Committee
- Hector Balderas - Mark Brnovich -
- Wayne Stenehjem - Phil Weiser -

AG Alliance Co-Chairs
- Lawrence Wasden - Sean Reyes - Karl Racine -
AGA |   (916) 478 - 0075 | WWW.AGALLIANCE.ORG